Canada's year-on-year inflation rate rose 1.3 percent in July, down from 1.5 percent in June, Statistics Canada said Friday.

On a seasonally adjusted monthly basis, the consumer price index (CPI) was unchanged in July from the previous month, after increasing 0.2 percent in June.

Gasoline prices fell by 5.6 percent in July, bringing their 12-month drop to 14 percent. Fuel oil and natural gas prices also were down by double digits from a year earlier.

Clothing prices fell year over year, but consumers paid more for food and shelter, the data agency said.

Canadians paid 10.3 percent more for fresh or frozen fish last month compared to July 2015. The annual gain in fish prices is the largest in more than two years.

The core rate of inflation, which strips out volatile elements like fresh produce and fuel, was unchanged from June at 2.1 percent.

"Markets may be worrying about Canada's economic growth performance, but underlying inflation certainly isn't raising any eyebrows," noted Toronto-Dominion Bank economist Leslie Preston in a commentary.

In a separate report, Statistics Canada said retail sales in June unexpectedly fell by 0.1 percent from the month before. Economists had expected they would rise 0.6 percent.

Retail sales totalled 44.1 billion Canadian dollars (34.5 billion U.S. dollars) in June.

Canadians spent less on food, beverages and clothing, offsetting higher sales of motor vehicles. Sales at new-car dealers rose by 2.5 per cent, the first such increase in five months, Statistics Canada said.

Sales of alcohol fell 4.7 percent, the largest monthly drop in the category since June 2013.

The Canadian dollar weakened following the release of the retail sales and inflation reports.

Most analysts expected the Bank of Canada to keep its key interest rates at 0.5 percent for at least the rest of this year.

Source : XINHUA